Best way to mix with Kontact?

Sorry - I am a bit confused. It sounds like you are trying to mix the midi levels using the midi faders instead of the audio track faders.
 
1.  Do you have each instrument in the Kontakt instance routed to its own Kontakt audio output channels?
 
2.  Do you then have separate audio tracks inserted into your Sonar project and routed to pick up the separated output from each corresponding instrument's audio output from the Kontakt instance?  (so that rather than all the instruments in the Kontakt instance using ST1 for audio output, there is one stereo output in the Kontakt instance for each instrument in the instance - ST1 ST2 ST3, etc., and separate audio tracks in the project assigned to each of the separate outputs for each instrument from the Kontakt instance?)
 
3.  OR, are all your instruments in the Kontakt instance sharing a single ST1 audio output, and then you are attempting to control volume using the midi track faders for each of the instruments?
 
For MY projects, I load up 5-6 instruments into a single Kontakt instance, then I:
 
1.  Go into the Instrument settings for each instrument in the instance (using the wrench icon for each of the instruments and then clicking on Instrument to get to those settings), and once there I make sure that there I remove the check for the parameter that is labelled something like Accept Standard CC 7 and CC 11 volume.... (or something like that I don't have Kontakt open at the moment).
 
2.  Make sure the Output Section is open (there is a button at the top of the Kontakt instance for this), which opens up Kontakt's audio output channels, then click on the Batch Functions and click on the one that says something like 'Delete all output assignments and create one output channel for each loaded instrument'.  Doing this gives each loaded instrument a separate stereo output channel from the Kontakt instance.  (I also then rename each of the outputs to something shorter than what Kontakt names them - it tries to mash the preset name to be that output channel's name, and I prefer shorter names, like Piano, Organ, Violin, etc)
 
3.  Insert a midi track for each loaded instrument (sounds like you have this done already), and set the output to go to the proper Kontakt instance.  (I may havee 3-4 or more instances).  I also then set the Midi output channel for each midi track to the correct midi channel assigned to each instrument in the instance.  The midi output channel is set in each midi track, just below the FX Bin.
 
4.  Insert a single stereo audio track or a left and right mono track, for each of the loaded instruments from the instance, and set the input for each track to the appropriate audio output from the instrument's output channel from the Kontakt instance.  Because I renamed my output channels in the Kontakt instance, these are much easier to read in the drop-down presentation of outputs to pick from when assigning the audio track inputs.
 
5.  Now, I control all volumes for all of the instruments from the Kontakt instance through a combination of the instrument's output from the Kontakt instance, the Gain knob for the audio track(s) for that instrument, and I generally set everything initially so that all instruments run at around -18 dB, and I leave the audio track faders at unity.
 
6.  Once I begin mixing, I only have to adjust the faders for each track - or possibly also the Gain, but I NEVER have to mess with the midi faders whatsoever.
 
So - please run through how you are set up and how you are attempting to control things - THANKS. :)
 
Bob Bone
 

You do know that Kontakt can send audio to separate audio outs, an out for each instrument, right?  

I think using one instance per instrument is just a simpler way to achieve what I think the OP really wants - individual volume sliders in Sonar. I realize this isn't EXACTLY what he stated but often enough people will get stuck on thinking they need a certain solution when thinking about the problem another way is all that's needed. Happens to me all the time, at least.

There are indeed usually multiple ways to accomplish things in Sonar, and life in general, so my vote is to do what works for the person at the controls.
 
I too sometimes will reuse a Kontakt multi-instrument instance, and just swap out the instruments, but really I most of the time just create a new instance with exactly what I am looking to use, each time.
 
Setting one of these up is really harder to type up in a post than it is to actually build, particularly once you have done it a handful of times.  In steps, you are essentially only doing the following:
 
1.  Insert an instance of Kontakt (I usually pick the dll with the 16 outputs)
2.  Load up the desired instruments for that instance
3.  Click on the Batch Function in the Output Section that clears out the audio channels and creates a new audio output channel for each loaded instrument.  (It does it all for you)
 
The 3 simple steps above are all you need to do to set up the Kontakt instance.  I happen to also take a minute to rename each output channel to something shorter like: Piano, Bass, Violin, Piano.  THAT is not required - I just like it for readability.
 
Once the Kontakt instance is loaded, I do the following handful of steps to get the audio tracks and the midi tracks inserted and configured:
 
1) Insert 1 stereo or 2 mono audio tracks for each instrument in the Kontakt instance.  I usually use a mono Left and Right track for keyboard instruments, as I will usually also have one of the 2 tracks slightly delayed.
2) Set each audio track's Input to the corresponding Output Channel from the loaded instrument from the Kontakt instance.
3) IF using a left and right mono track for a given instrument, set initial panning for left and right.
4) IF any audio track(s) is going to go to a bus other than the master bus, set the Output for the track(s) to whatever bus you want it to go to.
 
The above are the simple steps for the audio tracks to go to each loaded instrument in the Kontakt instance.
 
For the midi tracks:
 
1) Insert a midi track for each loaded instrument in the Kontakt instance.
2) Set Output for each midi track to the corresponding instrument in the Kontakt instance.
3) Set the Midi Output Channel for each midi track to the appropriate midi channel Kontakt automatically assigned when each instrument was loaded into the instance.  (Midi Output Channel is found in each midi track, right under the FX Bin.
 
The steps above are all that are needed to get the midi tracks connected to the loaded instruments in the given Kontakt instance.
 
Doing the above steps takes VERY little time.
 
While the above gets the instance created, and all the tracks inserted and routed as needed, I ALSO then will set each instrument's gain to an initial value of around -18 dB.  I do this with a combination of playing a few notes for each instrument (the default velocity is 100), and then setting the Gain knob for each audio track.  IF needed, I will also go into the Instrument settings (the wrench in the Kontakt instance for each instrument, then the Instrument tab), and remove the check for the box that is labelled something to the effect of Accept Standard CC 7 and CC 11 Volume changes.
 
Anyway, the above is really not complicated, and once you do it a couple of times you will be a pro at setting a multi-instrument Kontakt instance up, along with the audio and midi track assignments.
 
Bob Bone

Alright guys. Hope this helps. Please try my presets. Hope it works in your setup.

1.Download and Unrar this rar file.
http://jmp.sh/M5BQBpE 
(If chrome blocks this website use the next link) https://www.mediafire.com/?dgm8bngos4w4bc4

You should get 3 files.

2. Move "16 channel Output.cfg" to C:\Users\Jasper Roy\AppData\Local\Native Instruments\Kontakt 5\default\Output Section Presets

3. The other 2 files are Sonar synth track template I have created with 8 & 16 audio and midi tracks. All set up and routed properly.

4. Move the 2 files to where Sonar stores them and load any one of them.
    OR Just drag them Inside sonar track view from anywhere.(Dont drag both at the same time)

5. The template will get loaded and now you should be able to open Kontakt from the loaded template tracks. Open Kontakt.

6. In Kontakt's output window(mixer) Select "16 channel Output" (the output preset you moved in step 2) from the
preset/ configuration drop down list. Set it as default(if req)

Done.

now everytime you need to use kontakt just load the track template. Within few sec you are ready to go on and load upto 16instruments in 1 instance of kontakt. There wont be anything to worry abt.  If you have 16 fav instuments in kontakt you use often, Just load them all and select all the tracks and save it as your favorite track template, You could just load this in your next project and ready to record everything in mins. You can later delete the ununsed tracks anytime. Its easy to delete.